Standard Accident Insurance v. United States

102 Ct. Cl. 770, 1945 U.S. Ct. Cl. LEXIS 6, 1945 WL 4039
CourtUnited States Court of Claims
DecidedJanuary 8, 1945
DocketNo. 43808
StatusPublished
Cited by6 cases

This text of 102 Ct. Cl. 770 (Standard Accident Insurance v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standard Accident Insurance v. United States, 102 Ct. Cl. 770, 1945 U.S. Ct. Cl. LEXIS 6, 1945 WL 4039 (cc 1945).

Opinion

Whitaker, Judge,

delivered the opinion of the court:

Plaintiff was the surety on the performance bond of the Joseph A. Holpuch Company, which had a contract for the erection of a hospital building and nurses’ quarters at the Veterans’ Administration Home at Leavenworth, Kansas.

On April 1, 1932, the Holpuch Company’s contract was terminated, due to, according to the findings of the contracting officer, its failure to proceed with such diligence as would insure completion of the contract by the agreed date. Thereafter, plaintiff-and the Veterans’ Administration entered into an arrangement, under which plaintiff agreed to take over performance of the contract and sublet it to Joseph A. Holpuch Company. Pursuant to this agreement, plaintiff and the Holpuch Company entered into a contract on April .25,1932, whereby the Holpuch Company agreed, as the plaintiff’s subcontractor, to perform all work required by the contract. Thereafter, all payments due from the defendant were made to the plaintiff and the plaintiff in turn transmitted them to the Holpuch Company.

In this suit plaintiff sues for certain excess costs incurred for work done which it alleges was not required by the contract, and it also sues for damages for delays caused by an independent contractor who had a contract with defendant for the installation of the plumbing and other mechanical work.

Defendant defends, first, on the ground that whatever excess costs may have been incurred and whatever damages may have been sustained were incurred and sustained by the Holpuch Company and not by plaintiff and, therefore, it says plaintiff cannot recover.

[786]*786This is not a good defense. When the Holpuch Company’s right to proceed was terminated, the surety company, by agreement, was substituted for it as the prime contractor, subject to the obligations of the contract and entitled to all rights and benefits accruing under it. Fidelity & Casualty Co. v. United States, 81 C. Cls. 495. If excess costs were incurred, they were incurred by plaintiff, so far as the defendant is concerned. This is clearly true in a case where the surety employs another contractor to complete the work. That the same contractor was employed would seem to make no difference.

It may be that the surety undertook to require the Holpuch Company to bear these excess costs, but whether or not it did or whether or not it succeeded, the record does not show. But even if it did, this does not relieve the defendant from liability. Defendant has not paid whatever debt it owes. Its obligation has not been discharged. Whatever may have been paid by the Holpuch Company was not paid for the account of the United States.

The first item of plaintiff’s claim is for the cost of changing certain barrel bolts on window screens. On final inspection by the Government’s officers plaintiff was required to change them in order to make a more workmanlike job. Plaintiff did so, at a cost of $387.20. We do not need to decide, however, whether or not plaintiff’s superintendent of construction was justified in requiring the change, because plaintiff made the change without protesting to the contracting officer against being required to do so. Article 6 of the contract gave the Government “the right to reject defective material and workmanship or require its correction.” If plaintiff thought the job was not defective, it was required by article 15 of the contract to present the matter to the contracting officer for his decision. This article provides:

* * * all disputes concerning questions of fact arising under this contract shall be decided by the contracting officer or his duly authorized representative, subject to written appeal by the contractor within thirty days to the head of the department concerned. * * *

Plaintiff did not present the matter to the contracting officer and, therefore, is not in position to complain of the requirement of the superintendent of construction.

[787]*787Plaintiff’s next claim is for the cost of installing access panels not required by the plans and specifications. Plaintiff was required by the superintendent of construction to install 61 panels which were not required by the plans and specifications. This was extra work required of plaintiff, but plaintiff cannot recover therefor, in view of article 5 of the contract, which provides:

* * * no charge for any extra work or material will be allowed unless the same has been ordered in writing by the contracting officer and the price stated in such order.

This work was not ordered in writing by the contracting officer. On the contrary, when the superintendent of construction advised the contracting officer that he had ordered the installation of these 61 extra panels the contracting officer ruled that they were not to be installed.

The purpose of article 5 is to protect the Government against the cost of extra work ordered by a subordinate, but not approved by the contracting officer. Had plaintiff waited to secure the ruling of the contracting officer the additional access panels would not have been installed, and plaintiff would not have incurred the additional expense.

Plaintiff’s next claim is for $332.75 for membrane waterproofing. The superintendent of construction ruled that this work was required by the plans and specifications. Plaintiff did the work without presenting the dispute to the contracting officer and, for the reasons stated above, cannot recover.

The next claim is for $3,993.00 for wood terrazzo grounds. These wood grounds were not called for in the specifications, but the superintendent of construction required plaintiff to use them because it was good practice to do so, and because they were necessary to do a workmanlike job.

Some justification for the ruling is to be found in section 24 C (19) of the specifications, under the general heading of “carpentry.” This section reads:

Wood grounds shall be provided where shown or required for plastering, for securing all wood trim or other finished woodwork and for securing the work of all trades. * * *

[788]*788But the contractor protested to the contracting officer against this ruling of the superintendent of construction and asked for an order in writing on the ground that this was an extra. The contracting officer, however, ruled that the contract required the work to be done, but left to the plaintiff the settlement of the dispute as to which of its subcontractors would be required to do the work. This ruling of the contracting officer as to whether or not these wood grounds were required by the specifications, being a ruling on a question of fact, is final under article 15, supra, in the absence of appeal to the head of the department. No appeal was taken and plaintiff, therefore, is bound by the ruling.

Plaintiff’s next claim is for the cost of repairing cracks in the plastering, in the amount of $497.23. Under the specifications the contractor was required to maintain in the building a minimum temperature of 40° F. while the plastering was going on. In order to obtain this temporary heat the contractor was permitted to connect the radiators for the buildings to the then existing heating system at the Veterans’ Administration Home.

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Related

Fruehauf Corp. v. United States
587 F.2d 486 (Court of Claims, 1978)
Ben C. Gerwick, Inc. v. United States
285 F.2d 432 (Court of Claims, 1961)
Brown & Root, Inc. v. United States
116 F. Supp. 732 (Court of Claims, 1953)

Cite This Page — Counsel Stack

Bluebook (online)
102 Ct. Cl. 770, 1945 U.S. Ct. Cl. LEXIS 6, 1945 WL 4039, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-accident-insurance-v-united-states-cc-1945.